Preston — The town has received approval for a $964,250 federal grant from the Economic Development Administration to continue the cleanup of the former Norwich Hospital property, U.S. Rep. Joe Courtney, D-2nd District, announced Thursday.

The grant would require a full local match, and town officials are hoping to use a $4 million town match required for a separate low-interest state loan as the federal match as well, “further leveraging that money,” First Selectman Robert Congdon said.

The state Department of Economic and Community Development approved loan terms last week for the $4 million hospital property cleanup loan. The town would pay 1.5 percent interest, but no interest in the first five years. For every 100 permanent jobs created by future development on the hospital property, $1 million of the loan would be forgiven outright.

Town officials will present plans for the $4 million town match for the loan at upcoming informational meetings later this fall. A referendum would be necessary.

“The Town deserves tremendous credit for demonstrating to EDA that they have a credible plan,” Courtney said in a news release. “I am pleased that our joint efforts succeeded in this highly-competitive environment, and that Preston can move ahead. The demolition of the buildings and redevelopment of the former hospital complex will allow a once-blighted site to spur economic growth and opportunity for our region.”

Congdon called the grant approval “great news.”

“It keeps progress going at the hospital site and it’s another piece in the puzzle that’s getting this property cleaned up,” he said. “It’s incredible the amount of work we’ve gotten done there in the past two years.”

The Preston Redevelopment Agency plans a tour of the hospital property this fall for residents to see the demolition progress to date using state and federal grants.

Congdon gave credit for the town’s successful EDA grant application to Town Planner Kathy Warzecha and Preston Redevelopment Agency member Jim Bell, who oversees funding for the agency.

Warzecha thanked leaders from throughout the region for helping Preston obtain the grant. When the Southeastern Connecticut Enterprise Region approved a regional economic development plan, it placed cleanup of the Norwich Hospital as the top priority.

“It shows that this is a regional project, and it put it as a really high priority,” Warzecha said. “That was one of the reasons why we ranked so high.”